November 24, 2010

Today's Economic Times reports that the Thomson Reuters acquisition of offshore legal outsourcing leader Pangea3 was valued at $100 million, "according to a person close to the development." Since the venture capital company Sequoia jointly owned 50% of Pangea3 at the time of Thomson's purchase of 100% of Pangea3's shares, with Sequoia having invested $7 million, Sequoia may have done very well indeed. “This is a fantastic exit for Sequoia as we have a complete cash deal,” reportedly said Sumir Chadha, the managing director of Sequoia Capital India. Here are some excerpts from the article:

Private equity major Sequoia Capital has recorded one of its most profitable exits and its fourth for the year with the sale of legal process outsourcing (LPO) firm, Pangea3. Global information services major Thomson Reuters bought the Mumbai-based firm on Friday last week and the deal was valued at $100 million, according to a person close to the development.

Sequoia Capital invested $7 million in Pangea3 in 2007, while another investor Glenrock Group put in over $4 million a year earlier. The two PE investors jointly owned 50% of the LPO firm set up by entrepreneur duo Sanjay Kamlani and David Perla.

“This is a fantastic exit for Sequoia as we have a complete cash deal,” said Sumir Chadha, managing director, Sequoia Capital India. The fund has seen three major exits this year including the public listing of SKS Microfinance and a partial exit from Dr Lal Path Labs. The fund also sold its entire stake in Manappuram Gold Finance through a public market sale.

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"This was an M&A deal that came at the right time; we are a six-year-old firm and as with all VC-backed firms there is expectation of return for shareholders,” said Sanjay Kamlani, co-founder, Pangea3, who will continue to run the firm along with the existing team. "The management is committed to growing the business further," he said. Kamlani and Perla along with other employees owned the balance 50% of the firm that has a roster of big-ticket clients including top 250 law firms in USA.

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